Microsoft (NASDAQ:MSFT) is developing its own artificial intelligence (AI) chip, code-named Athena, as per a report by The Information. The chip, which the company is working on since 2019, is expected to support the company’s vision of leading the AI wave. The in-house chip is already being used by some Microsoft and ChatGPT-creator OpenAI’s employees so that they can test the technology.
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Microsoft is accelerating the launch of Athena following the success of the AI-powered chatbot ChatGPT. These in-house AI chips are designed to power the large language models that process huge amounts of data and can generate human-like content. The move could reduce Microsoft’s dependence on chip giant Nvidia’s (NVDA) GPU chips and bring down costs.
Aside from Microsoft, other technology giants, including Amazon (AMZN) and Alphabet (GOOGL, GOOG), are also developing their own AI chips. Currently, Nvidia’s A100 and H100 chips are being extensively used by several companies for their AI projects. Nvidia is considered to be one of the key beneficiaries of the AI wave.
Meanwhile, Microsoft is making substantial investments in AI, including an estimated $10 billion in OpenAI, to capture the massive growth opportunities in this space. The company is leveraging its partnership with OpenAI to launch AI-powered tools. Earlier this year, Microsoft launched its AI-powered Bing search engine and Edge browser. On Monday, Alphabet shares fell on news that Samsung (GB:SMSN) is considering making Microsoft’s AI-powered Bing the default search engine on its devices.
Is Microsoft a Good Buy?
Wall Street has a Strong Buy consensus rating on Microsoft stock based on 27 Buys, four Holds, and one Sell. The average price target of $301.83 indicates 4.7% upside. Shares have risen 20% so far in 2023.
